Fastjet looks to kick-start growth

The news that African low-cost carrier (LCC) Fastjet is to add an additional A319 to its fleet on Monday (May 18) may not exactly have sent shockwaves through the industry, but agreeing a lease for this one aircraft could be the kick-starting of its stalled growth plans.

The pending arrival of the A319 on lease from ICBC Leasing will be the first aircraft to arrive as a result of Fastjet acquiring £50m ($74m) in new funding last month. Its intention is to buy more used A319s, designed to aid expansion in six markets of Tanzania, Kenya, South Africa, Zambia, Uganda and Zimbabwe.

Ed Winter, Fastjet’s CEO, said the move represents a “strong step forward” for the LCC as it begins its expansion plans and negotiates to bring further aircraft into the fleet. The airline is looking to turn the tide following a rocky last few years. Since its 2011 launch, backed by easyJet founder Stelios Haji-Ioannou, Fastjet has failed to break even, accumulating more than $200m in losses since its inception.

It has also been beset by setbacks, including a series of lawsuits brought by suppliers and the hassle of selling off its stake in Fly540 – another African loss making airline – last year. Yet despite these hindrances, the scale of its growth plans remains ambitious.

If these ambitions are fulfilled, Fastjet will have 34 aircraft operating to 40 destinations by the end of 2018. Given it currently operates a fleet of just three aircraft, this expansion seems like a Herculean task.

What’s more, the carrier also aims to encourage one per cent of the population in the six countries it will operate in fly with Fastjet during the next three and half years.

Fastjet’s growth plans are incredibly ambitious, even more so when you consider that the African region’s aviation market is growing at a slower rate than others. That said the market for cheap regional fares across the continent remains largely untapped.

Carriers from outside the region  are also seeing market opportunities. Middle Eastern LCC flydubai, for example, is eyeing up in East Africa.

But Africa remains regionally unbalanced; out of the nine LCCs operating in the whole of Africa at present, almost half of those are based in South Africa.

If Fastjet is to one day span the continent and truly become a pan-African LCC, it’ll be hoping for a smother ride ahead, than the one it has experienced so far in its short life.

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